> At some point cars are so old and worn down that you're going to have to replace something every few months, and the maintenance costs explode – sure, you can completely refurbish the car, if you want to, but that's easily in the magnitude of a new car.
I half agree. You are correct that cars will eventually wear out, but not in 150,000 miles. Most cars today can go over 300,000 miles with basic maintenance.
The original post stated the car needed $3000 work of work, which seems reasonable. If he had put that money into the car that repair would be good for another 150,000 miles - before he does it again. Now we have to assume another $3,000 (number pulled out of me head, but it seems reasonable) in other maintenance alone the way. So for $6,000 more he could have a car with 300,000 miles on it.
What did the new car cost? If we assume that he got the full $4,000 value on trade in (seems unlikely, but dealers often will not consider overdue maintenance in trade in value) plus the $3,000 he needed to pay, plus the $3,000 that the old car would need in maintenance, minus $1,000 for maintenance on the new car we can suggest that $10,000 comes off that price.
Did he make a bad decision? You need to decide which of my numbers above are valid before you can answer it. It is quite likely that buying a used off-lease car with 30,000 miles on it and trading it in after 100,000 miles is probably the cheapest option in the current market.
BTW, the dealer taking the trade-in above is not stupid. He isn't going to fix the car. He is going to ship it to Mexico, sell it for $4,200 with the note that it needs some work done. The buyer in Mexico has just saved up $4,500 for a car (this took a while) and he will do the work himself. (Even if he paid someone to do the work the cost would be much less than our $3,000 figure above)